Committee
Eurogroup
Country
Belgium

Author

Cite as https://mymun.com/ppdb/8103

TOPIC 1: PROPOSALS FOR DEBT RESTRUCTURING PROGRAMS FOR ANY INDEBTED EUROGROUP COUNTRY

Establishment of Euro through Maastricht Treaty in 1992 seemed as one of the world’s stepping stone to achieve global economic integration, which resulted into an easier mechanism to borrow and lower interest rate. Thus, single currency and unity of economy rise its doubt when facing economic crisis, because the difference of fiscal policy could not work hand in hand with single monetary policy. Housing bubbles in US Economic crisis highly impacted countries in Eurozone such as Greece which becomes the first Eurozone country that unable to pay its debt for the first time. A question arise, is the economic integration feasible to be applied?[1] Then, easier borrowing was misused by several countries (further called as indebted countries). They used the loans to spend on job benefits and pensions, like in Greece, Italy, Spain, and Ireland which are unbeneficial for economic development, and just increase the spending without really having any significant progress.

As one of the initiator of Eurozone, Belgium also experienced debt crisis severely. It made the prime minister, Yves Leterme chose to resign. But then, in December 2011, Di Rupo took significant measures to tackle the crisis such as extension of the degressive aspect in the unemployment allowances, the stricter age and career requirements on early retirement, the adopted regulation of career interruption, the new fiscal treatment of the use of company cars, etc.[2] In that critical condition, at least, Belgium still could maintain its budget deficit at under 6 per cent, lower than Eurozone average. However, this economic crisis increases the awareness for Belgian to actively participate and criticize their government. Political discourse was sparked up in a good way. People were able to voice their opinion out to increase social control towards the existing government.

In conclusion, Belgium believes that to address the problem of debt crisis, there are three main issues which should be focused on: unequal economic capacity, debt structure, and involvement of private sectors. Therefore, Belgium...